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Will Somebody Please Think of the Children!?

The deficit has once again shouldered its way into the national conversation, at least in the rhetoric of Republican Congressman adamantly opposed to, well, anything that President Obama proposes to do. Press the average member of the GOP for a rationale for his opposition to the policies of the new administration, and, to the extent that there is a semi-cogent rationale, it will probably boil down to the deficit, to the tremendous burden we are compelling our children, grandchildren, and remoter descendants still, to shoulder, to the end that we might live more sumptuously - or at least refuse to own our own profligacy, to admit our errors - in the present. Charitably, we have a duty towards posterity, that we not impoverish them in order to live large in the now.

The trouble is that this is mere cant, the wearisome, hacktastic bloviation of cynical operators attempting to cloak their vices in the stolen raiment of virtue. No one in Washington, save Ron Paul, so far as I can determine, really cares about such quaint notions as the deficit and the putative obligation to consider posterity, as evidenced by, well, actually-existing conservatism and the Republican Party. These latter are entities that never blanched at the idea of pouring untold quantities of borrowed money down into the sand mound septic system that was the Iraq war, a war of choice - quantities, as estimated by Joseph Stiglitz, that will exceed three trillion dollars, all of them ultimately borrowed. The conservative movement and the Republican Party, moreover, greeted with squeals of ecstasy and rapture the tax cuts implemented during the first term of Bush the Younger, notwithstanding the facts that a) they had been hilariously wrong in prophesying the apocalypse when the Clinton tax increases were implemented; b) that it was only the combination of the higher marginal rates under Clinton and the pseudo-prosperity of the NASDAQ bubble of the late 90s that caused the budget deficit to shrink, and ultimately to vanish, albeit temporarily; and c) that, for reasons I have discussed previously, there is no possibility whatsoever of funding governmental operations save by hiking marginal rates on upper-income earners, since virtually all other economic groups have suffered inflation-adjusted stagnation (defined as, depending upon the statistics one favours, anything ranging from slight real declines to slight marginal increases, or something in between) since the early 70s - that's where the money is, and refusing to get that money entails a burgeoning deficit.

At this point, most conservatives will be fulminating about the evils of progressive taxation and the imperative of redoubling the commitment to small government as the complement to tax reduction. I understand those arguments, and am not entirely unsympathetic, but it must be understood that the detested welfare state, and of its taxes and pomps, is, when grasped in its historical origins - ie., according to the processes by which it garnered public support, and by which it is sustained - not so much the result of some dastardly conspiracy to overthrow everything that was good and lovely about Old America, but a response, however flawed and tainted by ambition, to the very real dislocations and instabilities generated by modern industrialism and concentrated capitalism. Most people are not libertarian supermen, and will endure only so much destructive creation before seeking such shelter as they may find in the arms of countervailing power. If the Gilded Age, for example, had been the prelapsarian state that some portray it as being, the masses would have looked at Progressives and Socialists as cranks and fools, and gone on their merry ways, to enjoy their ever-multiplying prosperity, their stable middle-class lives, and the expanding frontiers of personal freedom. They did not do these things because it was not so, and because man does not live by the opportunity for economic self-creation alone. The moral is that concentrated power and concentrated wealth are always twinned, because they are infinitely convertible, and that if one would abolish the former, one will, of necessity, have to limit and divide the latter; likewise, if one objects to the dependency and servility that the welfare state breeds, one must also object to the dependency and servility that economic concentration brings, masking it all the while as liberation - the parodic liberation of bread alone: more and cheaper stuff.

But I digress. Reality is what it is, and in reality, given that the welfare state will perdure, we're all going to shoulder a higher tax burden, the wealthiest more so. One can rue this, but ruing it is, on the deepest understanding, equivalent to ruing three or four-hundred years of Western history - modernity. Men will seek to regain a measure of the stability of which modern capitalism deprives them, and even a faux rootedness, the omnipresence of the welfare state.

None of this is to postulate that progressives truly care about the deficit, for that would be to postulate an obvious falsehood, given, well, how they actually govern. The point is that no one really cares about the deficit, and that the deficit is a political football, a talking point, a rhetorical cudgel, a cynical piece of rabble-rousing: a bit of misdirection used to make people think that we're concerned about responsibility, when all we're really concerned with is what justifies irresponsibility, for it is on this point that left and right differ.

Comments (6)

This is a good piece, Maximos. We are not libertarian supermen, as you say. Since I cannot rival your expression in the main point of the article, which I find persuasive, may I question a pair of minor points I find less persuasive?

1. When you write that "No one in Washington, save Ron Paul, so far as I can determine, really cares about such quaint notions as the deficit and the putative obligation to consider posterity," I wonder how you have tried to determine it, for such cynicism is hard to refute. Naively, for what it's worth, I still believe that most Congressmen care. Incontinence is a vice Congressmen share in varying degrees with the rest of us (or at least with me), but is it not possible for good men who disagree over means to be frustrated, not by ill will on the part of any one of them, but merely by the inherent dynamics of the political system in which they act?

2. I admire your excellent essay "Mere ideas in the saddle" very much, and have often given thought to it since reading it last year; so it is with some trepidation that I advance an abstract idea now. The idea is this: that money is not wealth, but rather a means of exchange between one form of wealth and another. If I borrow money, spend it, consume the things bought and then fail to repay the loan, then you or someone else will be deprived of the use of the resources I have wrongly commandeered. However, if a great state borrows money, spends it, consumes the things bought and then, well, indefinitely postpones repaying the loan, who is deprived of the use of the resources wrongly commandeered. Our children? Maybe, but the state does not have magical powers or time-travel technology: it cannot actually commandeer today an automobile or a loaf of bread which our children will produce twenty years hence. One does not minimize the financial obligation that passes to our children, but if the financial obligation were too heavy to bear then they would more or less decline to honor it, in one way or another. Money is a good proxy for wealth only in microeconomics; in macroeconomics the actual correspondence between money and wealth is not so clear, particularly in the long term, when the very government that prints the money undermines it by running persistent deficits. That car built twenty years from now: someone is going to drive it then, not today. That someone may or may not be the person who holds Treasury notes in the interim.

Think of it the other way. Suppose the U.S. Treasury were stockpiling cash surpluses year after year. Would this, in itself, directly make our children wealthier? There is little question that it would simplify their national finances, but when a future federal government bought, say, a hundred new tanks for the Army twenty years hence, the government could not somehow "buy the tanks out of savings" at no actual expense to the citizenry. No, our children would still have to actually build the tanks, savings or no, which would mean that they would have to go without something else at that time.

Savings represent actual wealth for an individual, but this is not necessarily always true for an entire country. The reverse may apply with respect to debt. Again, I must emphasize: I do not condone these irresponsible deficits; I only wish to understand the complexities of their actual effects. I suspect that these public deficits may hurt us as much as or more than they hurt our children, at least in the direct sense. It's strange how that works.

But surely, Maximos, you aren't saying and aren't under the impression that the present administration's goals vis a vis the size of government are simply to increase the marginal tax rate on the very richest in order to fund present programs! I mean, you can't possibly think that. So why talk as though "we can't roll back history and have to fund Social Security (or whatever) somehow" is an answer to present Republican worries about Obama and big government?

...is it not possible for good men who disagree over means to be frustrated, not by ill will on the part of any one of them, but merely by the inherent dynamics of the political system in which they act?

Perhaps it is merely my native cynicism, but I increasingly incline to the opinion that there is something more in play here than mere frustration with the inherent dynamics of the political system. For one thing, there is the obvious counterexample in the person of Ron Paul, who is not merely frustrated with the structural logic of the political system, but refuses that system his formal cooperation, acting as a Dr. No. Beyond that, there is the manifest incoherence of holding in one's mind, simultaneously, the following ideas - both that the system is locked in an undesirable dynamic, tending not so much to destruction as to the gradual conversion of the American system into one resembling a European dirigiste state, and that one, far from grasping this entity as an integrated whole, a structure comprising a welter of almost unspecifiably complicated relationships, dependencies, expectations, functions, & etc., will instead pull at some of the strings one finds, in order to obtain some of what one wants. The exercise is conducted in defiance of that law of unintended consequences to which conservatives advert in most debates about political economy, for the probable consequences of this approach - making a tacit peace with the system in most respects, but underfunding it - are that we will have a sclerotic and ineffectual dirigiste system, one that exacerbates instability and renders economic collapse more likely than it would be were we to have a reasonably well-funded system. "Starve the Beast", in other words, has failed - and this is really the only coherent rationale that can be assigned to conservative political economy over the past generations - because it leaves untouched both the structural reasons for the existence of the Beast (which, despite popular conservative rhetoric, have very little in practice to do with resentment) and the public clamour for the same, and, by attempting to give the Beast less money, habituates the masses to the idea that they receive a lot of Big Government for a much lower outlay than would be anticipated. Hence, they readily request more, because it is a bargain from their perspective. Once one grasps this systemic logic, one might arrive in more or less the same political space as Bruce Bartlett, who disapproves of the system, yet recognizes that the conservative approach to that system has been either cynical or incompetent, a legacy of malfeasance.

Grasping the nature and logic of the American managerial state leads inexorably to the conclusion it can be overcome if and only if its historical conditions are abolished; this, as I have indicated, cannot involve the silly Atlas Shrugged imposture of simply refusing to pay for the managerial state, for the notion of a society from which big government has been banished, yet remains subject to concentrated wealth, and all of the attendant instabilities, is as fully utopian as the most extravagant socialist fantasy: it is a vision of (dis)order that exists nowhere, and cannot exist, though, as history demonstrates, the attempt to realize such gnostic political cosmologies can be attempted at the barrel of the gun, as in Latin America. People will have some measure of stability and predictability in their lives, and if they will not receive these from their communal and economic relations, as these are relentlessly destabilized under modern political economy, they will attempt to secure them from the state, and it is vain and unavailing to protest that this is an illusory and servile safety, for it is human nature to prefer the transient but comforting illusion to a harsh and pitiless reality. Distributism is ultimately more pragmatic than the attempt to combine both the desolating gales of destructive creation and the night watchman state, because it accommodates both human nature and the historical genesis of our present system. The trouble with conservatives pulling at the loose threads of the managerial state is that they have only discredited themselves; it not mere frustration which explains their conduct in office, but profound philosophical incoherence.

Finally, while I am uncertain in my thinking regarding your speculation on debt, what I am confident in saying is that, were future generations to repudiate debts so rashly accumulated, they would immediately find their circumstances straightened, as they would then be compelled to live within their radically reduced means.

No, I'm not saying that at all. What I am attempting to do is to lay out a framework for understanding the political dynamics of the welfare/managerial state, to the end that conservatives might finally reckon with the origins, nature, durability, and support for the thing, instead of indulging in the shadow-play of the past generations. People do not clamour for the welfare state because they simply love the reification "Big Government", or because they are desirous of punishing "the achievers", as the idiocy of talk radio would have us believe, but because the welfare state, however wrongly or deceptively, answers to actual structural conditions in American society. And if conservatives would seek to eliminate that detested answer, they must first redress those conditions, and this cannot be done by pretending that the welfare state could be abolished while leaving in place the political economy that summons it forth. Unless, of course, they want to appeal to some of the more discreditable passages of Hayek (or was it Friedman), in which it was argued that the combination of political authoritarianism and "economic liberty" was to be preferred to that of democracy, or representative government, and some form of mixed economy.

Big government is a symptom, and not a cause. Conservatives have not yet grasped this reality.

Your point is well taken. I am afraid that if I were a Republican Congressmen I would have been pulling on the strings of which you speak: Ron Paul is a better man than I. Your article fails to make me feel much guilt only because I have not actually been a Congressman.

[W]ere future generations to repudiate debts so rashly accumulated, they would immediately find their circumstances straightened, as they would then be compelled to live within their radically reduced means.

Unfortunately I suspect that Ron Paul would say that we have already repudiated the debt in stages from 1933 to 1971, by making debts incurred in gold repayable in fiat money. Inherently, though naturally not without consequence, the Federal Reserve can stretch fiat money-denominated debts as far as it likes, thus repudiating dollar-denominated paper on whatever schedule and in whatever increments it deems convenient or prudent. This is chiefly what I meant when I wrote, "[I]f the financial obligation were too heavy to bear then our children would more or less decline to honor it, in one way or another."

The principal threat to impoverish our children in my judgment is the United States' incredibly rapidly deteriorating industrial base, for, so long as the U.S. remained a tariffed trading nation as she was from 1816 through 1939, so long as she remained an industrial power that made or could make itself most of things her people needed and wanted, there was only so much poverty financial operations could induce.

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